Bear Stearns and Merrill Lynch have raised $400 million of Penn National Gaming's $600 million "B" piece after its institutional debut on Jan. 23. Some investors were said to be waiting last week on PresidentGeorge Bush's State of the Union Address to consider any bids into the credit. However, another banker said this had minimal impact on the deal. Both big and small tickets have rolled into the loan since its retail launch, the banker said. The $800 million acquisition credit's "B" piece is priced at LIBOR plus 31/ 2% with a 1/8 % upfront fee. The lead banks do not expect any concessions at this point, the banker said, adding that the deadline is Feb. 10.
When launched at the managing agent level, the spread on the "B" was 3% over LIBOR. The pricing on the $100 million revolver and $100 million "A" piece also increased from LIBOR plus 23/ 4% to LIBOR plus 3%. There is a 50 basis point commitment fee for pro rata retail commitments above $10 million, a banker added. Another banker said the pricing increases complement the B1/B+ ratings on the credit. Multiples are 3.1 times senior leverage and 4.7 times total leverage. Bear Stearns and Merrill officials declined to comment.
The deal will back Penn National's $780 million acquisition of Hollywood Casino Corp. William Clifford, Penn National's cfo, did not return calls by press time.